An insolvency agreement overseen by Smith & Williamson is being
challenged in the High Court amid fears that the arrangement could wipe billions
off the value of the UK commercial property market.
S&W corporate recovery director Tony Murphy supervised the disputed
company voluntary arrangement (CVA) for electrical retailer PRG Powerhouse,
entered into on 17 February. Commercial landlords are challenging the
arrangement in the High Court to prevent Powerhouse avoiding leasing liabilities
on 30 closed stores.
If other companies were able to discard lease obligations in a similar
fashion, the property industry could see billions wiped off its portfolio value
as a result, property experts claim. Although Powerhouse’s landlords have
accepted the arrangement, some are now questioning the deal.
Charles Woollam, a partner at property consultants Donaldsons, said that if
landlords could no longer rely on parent companies to bail out subsidiaries, it
would dent investor confidence.
Law firm Lovells is representing Prudential, Land Securities, Hammerson,
London Merchant Securities, BMW and Richminster Properties in a bid to revoke
‘The applicants support Powerhouse’s attempts to restructure its business and
believe that with the right proposals, the company should be saved. However, the
applicants firmly believe that this CVA unfairly prejudices the interests of
landlords,’ said Peter Best of Prudential.
‘Furthermore, if this CVA were valid it would have repercussions for the
property sector generally in potentially undermining the value of parent company
The case is expected to be heard in the autumn. Smith & Williamson would
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children